Preparing For The Rebound In Issuance Volumes: Leveraging Data And Analytics

The economic impact of COVID-19 is yet to be fathomed as the world economies slowly aim to recover. With businesses largely shut during the pandemic, issuances for finance were also hit with many companies shying away from raising capital or debt with the uncertainty surrounding the end of the pandemic. The pandemic opened the world to the possibilities of leveraging technology for growth. As the world economy slowly reopens and the resumption of trade picks up pace, structured finance analytics will play a large role as financial institutions learn to cope with the new issuances.

How Is Data The Key To A Post-pandemic World?

The extensive use of technology and social media has led to the generation of vast data that can be used and leveraged by organizations. Whereas Big Data as a term has existed for a long time, the generation of data has never been as high as today. It allows the companies to access real-time data of their customers, instant feedback, and where the customer is learning.

Data analytics allows a business to understand and decide on its core area of focus. Businesses and financial institutions can use data analytics to analyze a company’s viability.

How Can Data Analytics Help Businesses And Institutions?

Structured Finance analytics involves studying the business of the company as well as mining market data to analyze their prospects. Companies may want to expand or re-establish their business post the pandemic leading to a huge request for debt issues as well as equity issues.

Banks and financial institutions can leverage data and analytics to understand a company’s prospects or a business and prioritize their lending.

Structured finance analytics can help an institution understand the underlying valuations of a business or any issuance that they are planning. Bond Valuation, different asset class valuation, or even stress testing and scenario analysis can help the institution determine the risk involved and aid them in their decision making.

Data analytics can be used to understand the demand and hence prospects for a particular industry. This will affect the credit modeling of a company and determine its future cash flows. Data and data analytics can assist in portfolio management as well. Analysts can use the data to support either buy-side services or sell-side services, focusing on the valuation metrics of the underlying issue in consideration.

What Kind Of Institutions Can Data Analytics Assist?

Structured Finance analytics can assist various institutions, including corporate and investment banks, commercial banks, issuers, wealth managers, and advisory firms.

Conclusion:

Technology is more likely to play a huge role in business and how business is conducted in the future. E-commerce companies were the pioneers in shifting to technology. But, there is a vast amount of data being generated in the current times, leading to the development of Big Data, Machine learning, and Artificial intelligence. Add to that the ability of companies to use structured finance analytics to convert data into actionable information mean leveraged data and analytics will play a large part in the volume surge in issuance in the coming period.

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